The blog of the University of Edinburgh's PIR subject area

Is conflict-free fair enough?

This post by Liz Cooper, Research and Policy Manager – Fair Trade, Department for Social Responsibility and Sustainability originally appeared in the Just World Institute Blog. We gratefully acknowledge their permission to reblog it.

My role at the university is about working conditions and workers’ rights in university supply chains, to date referred to as ‘fair trade’. I was, therefore, interested to see two events organised by Politics and International Relations colleagues exploring questions of fairness in the extraction and trading of raw materials. On 26th February 2014, the university hosted ‘From Conflict Minerals to Fair Phones? A Roundtable on Resource Governance’, and on 27th February 2014, the Scottish Parliament hosted ‘#Britain and Africa after 50: Fair Trade, Fair Extraction, Fairplay?’, with both events bringing together practitioner and academic expertise on ethical questions related to mineral extraction and trade in Africa. Fair trade is not always a popular term, and is not always taken seriously, but whatever label we use, initiatives working to increase income levels and improve livelihoods for poor people around the world are clearly important.

Work on fairness in the university’s supply chains in past years has focused primarily on agriculture and food products, and the garment industry. This month, on the anniversary of signing up to be a Fairtrade University ten years ago, the university has become a founding affiliated member of a new initiative focused on fairness in the electronics industry, called Electronics Watch. This will initially focus on labour rights and working conditions in manufacturing (highlighting and building on what we are already doing), rather than extraction of minerals used in electronics such as computers, tablets and smartphones, but may incorporate mining issues in future. In this context, I’m interested in exploring what is already going on in university procurement relating to minerals in supply chains, and making such efforts more visible, which could help identify opportunities for joining up initiatives, and taking them further.

Extractives industries and ethics is a new topic to me, and is evidently complex. Reflecting increasing demand for electronics products, there is increasing demand for minerals required for their manufacture, which are found in developing countries, including many in sub-Saharan Africa. However, with minerals such tin, tungsten, tantalum and gold being easy to extract and transport without sophisticated technology, the majority of mining remains artisanal and small-scale – meaning it is unregulated and for the most part considered illegal. Artisanal and small-scale mining, while providing a key source of income for millions of poor people, is criticised for negative impacts on the health of miners, environmental degradation, and use of child labour. In addition, there has been widespread concern over ‘conflict minerals’, with a particular focus on minerals coming from the east of the Democratic Republic of Congo, where various armed groups are looting and smuggling minerals, and using profits to fund continued fighting. While many people choose to undertake mining activities to generate income, there are reports of people in eastern Democratic Republic of Congo also being coerced into mining, in violent conditions. Minerals extracted in such conditions are being acquired, via intermediary traders, by transnational corporations and used in the electronics equipment we are using today. In some cases, mining companies are paying taxes related to their extractive activities to African governments, but politicians are often considered to be corrupt, with large slices of profits taken by small elites and not trickling down to the rest of society.

So what regulation exists to tackle unfairness in mineral extraction? In the UK, the Foreign and Commonwealth Office makes reference to the UN Guiding Principles on Human Rights, and encourages firms sourcing minerals overseas to respect the relevant OECD Guidelines – but this remains voluntary.In the US, US and some foreign companies are now legally required by Section 1502 of the Dodd–Frank Wall Street Reform and Consumer Protection Act, signed into law in 2010, to disclose whether minerals have been sourced from the Democratic Republic of Congo or neighbouring countries, in an attempt to reduce demand for conflict minerals. Intel and Apple have developed stronger supply chain codes of conduct in the context of this law. Yet there is no requirement for transparency on where minerals are actually sourced from, and traceability schemes can be abused – so products from DRC could be fraudulently tagged as being from elsewhere by smugglers or intermediary traders. The multi-stakeholder Extractives Industries Transparency Initiative aims to ensure transparency regarding countries’ oil, gas and mineral resources, and calls for companies to publish details of payments made to governments in countries where they are extracting such resources. Yet critics suggest this has not to date been effective at tackling state corruption. An EU initiative on minerals sourcing is currently being developed, based on existing OECD guidelines, but is will remain voluntary, and criticised for focusing only on the Great Lakes region. While responsible sourcing (for example from non-militarised mines) from areas in conflict is encouraged, such regulations and guidelines have tended to lead to companies simply choosing to source from elsewhere, removing income generation opportunities from small-scale miners in conflict-affected areas.

Despite the voluntary nature of UK or EU initiatives, many procurement bodies here are taking steps to avoid conflict minerals in supply chains, including those in universities. After some exploration of the issue here at the University of Edinburgh, it emerges that electronics suppliers are being asked about what steps they are taking to avoid using conflict minerals in their products. The majority of electronics equipment at the university is bought via national framework agreements of higher education consortia, so they are the ones asking the questions. The National Desktop and Notebook Agreement asks the following questions to suppliers, in relation to conflict minerals and also electronics manufacturing conditions:

“Raw materials used in the IT electronics industry are frequently drawn from developing nations and/or regions affected by conflict and political instability. These may then pass through several intermediaries prior to their final assembly. How will your sourcing and supply chain strategy ensure that appropriate and comprehensive systems are in place to minimise or avoid potential ethical and social risks on behalf of our Members?”

“Further to the above question, the main and/or final assembly of IT electronics has been defined in the present century by the move to low-cost, high-volume assemblers on a global scale, these often located in regions such as eastern Asia where the necessary labour pool and infrastructure assists this. How will your sourcing and supply chain strategy ensure that appropriate and comprehensive systems are in place to ensure the ethical treatment of labour on behalf of our Members?”

The Scottish Government ICT Procurement frameworks include the following request to suppliers:

“The supplier will be expected to ensure that appropriate standards are maintained for its organisation and its supply chain regarding legal, ethical and social issues, including for example: health & safety, security of employment rights, equality, corruption and principles of fair trade. Please provide details of your plans and assurances that appropriate standards will be maintained throughout the life of the framework agreement”

APUC, a consortium in the universities and colleges sector, also refers to conflict and mining in a new code of conduct currently being worked on (which has included contributions from University of Edinburgh staff and students).

Some universities, such as the University of Exeter and St Andrews, have become ‘conflict-free campuses’ following student campaigns. Their procurement departments have agreed to ensure the inclusion of statements in their procurement procedures about recognising the situation of conflict in the Congo, and calling on suppliers to respect relevant OECD guidelines – although they are likely to be buying via framework agreements from the same consortia as the University of Edinburgh, so underlying practices may be the same. The ‘conflict-free’ label could be an option for Edinburgh to ensure consistent policy and standards on conflict minerals across a range of procurement routes, making visible existing efforts, which students and staff are unlikely to be aware of, and quite difficult to understand for non-procurement professionals. While it is not always easy within procurement legislation to demand really rigorous standards (as questions asked of suppliers must relate to the things being bought, and not to wider practices of the companies, and also firms find it difficult to know exactly what is going on much further down the value chain), procurement teams can engage with firms once contracts have been awarded, and take a soft-touch approach to encouraging further ethical commitments.

But when looking at extraction, it may be better to look further than conflict-free. The majority of the initiatives mentioned above focus on not sourcing, or responsible sourcing, from conflict-affected and high-risk areas, but are human rights and environmental considerations beyond the context of conflict taken into account enough? Fairtrade International, and their collaborations with NGOs such as Solidaridad, provides an example of going beyond conflict free, with their Fairtrade certified gold and silver (although other minerals as used in electronics manufacturing are not covered). Fair trade principles relating to a fair price and decent working conditions are applied to the mining sector, and exclusively to artisanal and small-scale miners.

Could further such certification schemes be developed in the minerals sector? Or should artisanal and small-scale mining be formalised by governments, rather than relying on third party standards to improve livelihoods? Arguments about formalising small-scale mining are common in the literature, with formalisation typically defined as legalising, regulating and providing technical support, in order to improve working conditions, reduce environmental degradation, and combat smuggling and corruption. However, debates are ongoing about the best way to formalise, ranging from top-down approaches, to grassroots formation of cooperatives, and about land access for miners. A key point arising from the two events held on this topic this February is that African states need to involved more in cross-sector collaboration with any regulatory initiatives, as pointed out strongly by Claude Kabemba, Director of Southern Africa Resource Watch, who spoke at both events, in order for them to be effective. How to tackle weakness of developing country governments is evidently beyond any efforts we can make as a university to change practices of suppliers.

When trying to do the right thing in terms of ethical procurement practices (which should be recognised as an important way in which the university can make have leverage over the practices of companies), this introduction to the context of mineral extraction highlights two things: firstly, there is a wide range of initiatives going on in this area, both in the university and in the wider world, but there is a lack of joining up of these initiatives. Secondly, it is hard to know how high to set the bar. Evidently alongside considerations about working conditions for miners, a range of questions relating to the use of finite resources for our escalating consumption of electronics and other goods need also to be considered. And if we are talking about fairness in extraction, what about fairness in terms of oil extraction and use – with ongoing conflict around oil in places such as Nigeria, displacement of communities and destruction of conservation areas by oil firms, and the fact that oil is used to transport and process the minerals referred to above and the goods they are incorporated in. Perhaps we just need to continue to push for small steps, and continue to raise the bar a little bit more with each step.